Sonic Healthcare Limited · ASX:SHL
Sonic Healthcare — H1 2004 Earnings Presentation
21 slides from Sonic Healthcare's earnings presentation, Feb 19, 2004
Slide 1: ee J
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Slide 2: Sonic Half Year Summary
@ 5x5 Sonic Half Year Summary (1 July-31 1 Dec 2003) > Excellent first half performance = EBITA up 13.6%... = Core Net Profit up 14.1% (net profit up 35%) = Core EPS up 12.4% = EBITA margin 18.3% (up from 17.0%) > Solid start to second half = January EBITA strong > Full-year guidance unchanged #.- R
Slide 3: Total Revenue and organic growth
Total Revenue 509,859 485,531 5.0% ~~ » Organic revenue growth * Sonic Australian diagnostics growth at or above market » New Zealand pathology growth rates. lower. than Australia «- Sonic UK pathology growth. strong “<8: Excluding acquisitions and foreign exchange rate effects, Sonic’s organic reve
Slide 4: HTT Tee
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Slide 5: EBITA, NPAT and EPS
EBITA ($000) 93,545 82,356 CoreNPAT > ($7000) | 55345 48,506 (CoeEPS (cents) | 28 |. 185 NPAT ($000) 25,720 19,101 EPS (cents) 9.78 7.37 Cash Generation 81,508 66,167 ONC | HEALTHCAR oO. ($7000)
Slide 6: EBITA Margin
EBITA Margin 18.3% 17.0% EBITDA Margin 22.3% 21:2% Margin expansion continues = Revenue growth with marginal profit = Entity cost reduction initiatives = Sonic synergy initiatives (benchmarking, IT, sales/marketing, purchasing, ‘centralisation etc) ™ Pathology margin, growth strong . Radiolo y margi
Slide 7: EBITA margin full year comparison
18.8% “2003: {@H1 @ Full Year
Slide 8: Full year guidance
$ Revenue 974.8 1,020 — 1,035 5.4% EBITA 173.1 185 - 195 9.8% Notes % Growth* calculated using mid-point of 2004 guidance >» Includes Omnilabs (loss in first half) and SDSG (from December '03) acquisitions : » Intangibles amortisation $59 - 60 million e1 » Assumes no further acquisitions @. :
Slide 9: Pathology division performing above expectation
» Pathology division performing above expectation > Largest four entities all outperforming budgets « Douglass Hanly Moir Pathology (New South Wales) « Sullivan Nicolaides Pathology (Queensland) - = Melbourne Pathology (Victoria) « .. Diagnostic Medlab (Auckland) ». Margin expansion set to:continue
Slide 10: Sonic Imaging division operations
rations >» Sonic Imaging division improving performance * H1 2004 margins up on.H1:2003.margins * H1 2004 margins up on full-year 2003 margins > Queensland X-Ray performing particularly well > Industry growth low in first half, impacting margin growth > Synergistic acquisitions (eg SDSG, Fremantle R
Slide 11: Interim Dividend
Interim Dividend — Interim Dividend 0. 40 | ooe | 25.0% Final Dividend (Forecast) 0. 20 (F) 0.17 17.6%(F) Full Year Dividend (Forecast) 0.30 (F) 0.25 20.0%(F) » Dividend fully franked at 30% >» Record Date ; = 3 March 2004 ; > Payment Date > " s 17 March 2004 » Dividend Reinvestment Plan suspended
Slide 12: Balance sheet and gearing
Receivables (current) Intangibles (net) $M Total Interest-bearing Debt $M Equity $M Interest Cover (EBITDA / Net Interest) “Xx ~1| Gearing (Net I.B. Debt / Equity)
Slide 13: Australian Pathology Funding
@ ens, Vv New, similar agreement expected from 1 July 2004 F n Pathology Funding Current Agreement: Government funding for total industry capped at 5% growth p.a. Agreement Term.:-1 July.1999 — 30 June 2004 3:3% fee increase from 1.December 2003 «Applied to ail pathology test items : «Intended to ad
Slide 14: Australian Radiology Funding
Vv oy Funding lian Radiol New 5 year funding agreement in operation since 1 July 2003 Government funding gap for total industry growth: "2003/4 - 5.5% = 2004/5 ~ 5.3% * 2005/6 ~ 5.0%, «2006/7. ~ 5.0% - = 2007/8 — 5.0% H1 industry growth rate 3.8% (per HIC statistics) Private billing unrestricted and
Slide 15: Roll-out of Sonic proprietary software ongoing
Roll-out of Sonic proprietary software ongoing «Pathology software — Apollo = Radiology software — Apollo RIS Apollo roll-out : Pathology « Sullivan Nicolaides Pathology — successful launch July 2003 = Diagnostic Services (Tasmania) — ‘successful launch December 2003 = Southern.IML Pathology (Wollon
Slide 16: UK Pathology
UK Pathology » TDL business stable and strong: > Omnilabs merger completed and. successful « Staff reductions « Property amalgamations « Equipment rationalisation » Laboratory relocated to new facility in Whitfield Street * Completed and successful - = State-of-the-art equipment and premises >» TDL
Slide 17: Medical Diagnostics Company
> Medical Diagnostics Company « Pathology : « Radiology > Large business * Pathology and Radiology are complex operations » ~$1 Billion annual revenue . » Growth history and expectation =». >.11,000 employed staff : >» Customer services outstanding «Tens of thousands of referring doctors « . Million
Slide 18: Sonic Core Values
~ Maintain confidentiality — @ 23 Sonic Core Values Commit to service excellence Treat each other with respect and honesty Demonstrate responsibility and accountability Strive for continuous improvement
Slide 19: Growth opportunities: Australia, New Zealand, UK
> Australia " Market growth in diagnostics ~5%_p.a. « Market share.growth, especially pathology " Synergistic acquisitions a > New.Zealand = Market growth =. Market share growth = > U.K. pathology = Ongoing private pathology growth = “Eurther joint ventures with NHS ys European pathology
Slide 20: Outstanding first half result
>» Outstanding first half result Strong start to second half Trending towards upper end of full-year guidance range = Revenue = Earnings « .Margins > Dependable business model. oo Revenue growth and profit drivers » ~ Infrastructure.and goodwill well established “» }e-Growth.opportunities - «Austral
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